Banks vs. credit unions: What’s the difference?

By Sabrina Karl

When shopping around for a top-rate savings account or CD, you’ll likely encounter several credit union options. If you’ve never banked with a credit union before, you might be wondering what the difference is between these institutions and traditional banks.


In short, banks are for-profit institutions that must satisfy their shareholders, while credit unions are not-for-profit with a focus on their member customers. And while almost anyone can open an account with a bank, only customers meeting certain geographic, employer, or other affiliation criteria can join most credit unions.


As a result of their profit status, banks tend to have higher fees and lower interest rates on savings. They may also charge more on loan and credit products. But their strong profit-making ability means they generally offer more products, branches, and ATMs, as well as better online and mobile options.


At a credit union, you may find better savings rates, lower fees, or lower-interest loans, as well as possibly stronger customer service. However, many credit unions offer less branch and ATM accessibility, and many have less customer-friendly mobile sites and apps.


You’ll also need to become a credit union member to be a customer. Each credit union defines a “field of membership” to indicate its affiliation or residency requirements. However, some credit unions accept members nationwide through a very broad member definition.


As for safety, the institutions are equivalent. Whereas your deposits at a bank are federally insured up to $250,000 by the FDIC, credit unions carry the same level of insurance from the NCUA.


For the highest convenience, broadest accessibility, and latest technology, banks will suit some consumers better, but at the cost of potentially higher fees and lower earnings. But for those wanting a top deposit rate or enhanced customer service, a credit union may be the winning bet.

Is a CD a good place to keep emergency funds?

By Sabrina Karl

You’ve heard the advice dozens of times: Establish an ample emergency fund so you can weather life’s financial surprises. But is a savings account the only smart place for these rainy day funds?


The answer is no. Sure, a high-yield savings account can be a great choice, giving you unfettered access to your money while earning a little interest. But stashing your savings in a certificate of deposit can be even smarter, since it’ll earn a greater return.


True, CDs aren’t as flexible as savings accounts. But their restriction on withdrawals can be helpful if it fends off your temptation to tap the funds. Plus, if you choose your CD right, accessing the funds in an emergency won’t carry a huge price tag.


But won’t you be hit with an early withdrawal penalty if you cash in the CD before its maturity date? Yes, but shopping around is key. Not all early withdrawal policies are created equal, and it’s not hard to find a CD with a mild or moderate penalty.


Also remember that this is money you’re socking away for an emergency, not to withdraw willy nilly. So because your odds of needing to access the funds are low, a reasonable early withdrawal penalty can be worth the risk.


Still, if you’re wary of putting all your emergency funds into a CD, opening multiple certificates enables you to cash out just a portion of your CD funds rather than all of it. Or, put some into a savings account so you’ll always have ultra-quick access to a portion of your money.


If you’re saving the recommend 3 to 6 months’ living expenses in an emergency fund, it makes good sense to maximize your return while that money sits idle, and CDs can provide an excellent means to that end.

What is a callable CD?

By Sabrina Karl

Almost all certificates of deposit can be cashed out early if you need your funds before maturity, though you’ll pay a penalty for doing so. But there is a special class of CDs that allow the bank to cash you out early, rather than let you keep the CD until it matures.


The name of these certificates is callable CDs, given that they can be “called early” by the financial institution. Generally, they will be characterized as having a maturity date, just like a traditional CD, and then also a callable date.


For instance, you might see a 2-year certificate carrying a callable date of six months. That means that six months after opening the CD, the bank has the option to cash it out early. If they don’t, they’ll have another chance to call it six months later.


The benefit is that callable CDs typically pay higher interest rates than standard CDs, to compensate for the risk of your earning period ending prematurely. In addition, banks will agree to pay you a premium on the face value of your principal if they call the CD early. For instance, you may get back 102 or 103 percent of your principal, plus any accrued interest.


The downside is that you can’t rely on earning the fixed interest rate for the full maturity period. Not only that, but callable CDs are typically terminated early when rates are dropping. So if your CD is called, you’ll likely be left with cash that can only be invested at today’s lower interest rates.


Callable CDs can make sense for money you won’t mind getting back early, in exchange for upside potential on the rate. But when you prefer to lock in a top rate for as long as possible, non-callable CDs will serve you better.


How to protect your bank account from loan scammers

By Sabrina Karl

Fraudsters have honed numerous ways to separate you from your money, from outright theft of your personal information to sneaky ways of getting you to divulge it voluntarily. Since one of their deceptive tricks is posing as a loan provider, look for these signs of a legitimate lender if you’re looking to borrow money.


The Federal Trade Commission enforces numerous regulations on lending operations, including requiring all lenders to register in states where they do business. So one of the first things you can verify is whether the lender is registered in your own state.


The FTC also prohibits soliciting loans by telephone. So a marketing call for loan products is a strong tip-off that you’re dealing with a loan scammer. Also beware of offers mailed to you or pitched at your front door.


Legitimate lenders are keenly interested in your credit history when determining whether to approve your loan. So watch out for anyone touting guaranteed approval. Also beware if the lender never discloses that they’ll be pulling your credit report.


Another red flag of loan scammers is requiring you to pay application fees by providing them a prepaid debit card, a gift card, or a wire transfer. Although legitimate lenders are likely to charge fees, they typically add them to your loan balance rather than require upfront payment.


Lastly, any pressure to act very quickly before the offer expires is reason to pause. Legitimate loans may indeed have limited windows, but they will be sufficiently long to allow you to weigh options and make a careful choice.


A primary goal of loan scammers is extracting your bank account and social security numbers. So if you notice any of the warning signs above, be sure to keep your information private and move onto a lender you can verify.

How to protect your accounts from charity scams

By Sabrina Karl

Giving to help others is a noble gesture. But unfortunately, there are scammers out there striving to turn fake charitable asks into collections of bank account numbers and other personal information.


Charities are important to our society and helping fund their missions is not something to shy away from. But it’s smart to ensure the donation you’re considering will go to a legitimate organization rather than a fraudster looking to siphon money out of your bank account.


Fraudulent charity requests often purport to provide disaster relief or support veterans, police officers, or fire fighters. But when any kind of solicitation comes directly to you, especially by telephone, be alert and do your homework.


The number one rule is to never provide your social security number, your date of birth, or your bank account number to anyone contacting you for a donation. Also pay close attention to the charity’s name, as some criminals will closely mimic the name of a well-known charity to trick you into thinking they’re calling from an organization you’re familiar with.


The scammer’s goal is obviously to collect a donation that goes right into their pocket. But even worse is the potential for them to keep cheating you if they’ve successfully collected your banking information. Once a fraudster has your account number, the only way to fully protect yourself from future unauthorized withdrawals is to close the account.


If the cause being promoted interests you, do your own research to identify legitimate charities doing work you want to support. Then donate by credit card through the official ways they provide on their website.


In any case, whether you give by debit, credit, or check, monitor your statements carefully to ensure you’ve only been charged the amount you approved, and that unauthorized recurring donations aren’t later going through.


Is a CD a good place to keep emergency funds?

By Sabrina Karl

You’ve heard the advice dozens of times: Establish an ample emergency fund so you can weather life’s financial surprises. But is a savings account the only smart place for these rainy day funds?


The answer is no. Sure, a high-yield savings account can be a great choice, giving you unfettered access to your money while earning a little interest. But stashing your savings in a certificate of deposit can be even smarter, since it’ll earn a greater return.


True, CDs aren’t as flexible as savings accounts. But their restriction on withdrawals can be helpful if it fends off your temptation to tap the funds. Plus, if you choose your CD right, accessing the funds in an emergency won’t carry a huge price tag.


But won’t you be hit with an early withdrawal penalty if you cash in the CD before its maturity date? Yes, but shopping around is key. Not all early withdrawal policies are created equal, and it’s not hard to find a CD with a mild or moderate penalty.


Also remember that this is money you’re socking away for an emergency, not to withdraw willy nilly. So because your odds of needing to access the funds are low, a reasonable early withdrawal penalty can be worth the risk.


Still, if you’re wary of putting all your emergency funds into a CD, opening multiple certificates enables you to cash out just a portion of your CD funds rather than all of it. Or, put some into a savings account so you’ll always have ultra-quick access to a portion of your money.


If you’re saving the recommend 3 to 6 months’ living expenses in an emergency fund, it makes good sense to maximize your return while that money sits idle, and CDs can provide an excellent means to that end.


Will I be notified before my CD matures?

By Sabrina Karl

If you hold certificates of deposit, or are contemplating whether CDs are right for your savings goals, you might wonder what happens at maturity. For instance, do you have to track the certificate’s maturity date, or can you count on the bank to nudge you when the time comes?


Theoretically, you can expect the bank to notify you before a certificate matures. That’s because the Truth in Savings Act requires them to provide 30 calendar days’ notice before a CD’s maturity date, or 20 days if they extend a grace period of at least five calendar days.


That notification will be mailed or emailed, depending on preferences you’ve established with the bank. It will also outline your options on how to handle the maturing funds, with a deadline by which you’ll need to communicate your choice.


In most cases, you can: roll the money into a new CD with the same or comparable term; transfer it into a savings or checking account at that bank; or request the funds by mailed check or electronic transfer to another financial institution.


While it can be tempting to simply roll the CD into another certificate at that bank, the smarter move is to shop around to make sure you’ll earn a competitive rate. Once you know the top available returns, you can evaluate the rollover rate you’re being offered.


You’ll find that rollover rates are often not competitive, so moving to a different CD that pays a top national rate will be much more lucrative. This is why you might want to track maturity dates yourself instead of relying on a notice from your bank. Not only can bank oversights occur, but when you’re on top of maturity dates, you’ll have ample time to identify the smartest place to move your money next.

How to foil phone scammers trying to get your bank info

By Sabrina Karl

Whether or not you’re familiar with the term phishing, you’ve most likely been a target. That’s because phishing scams attempt to access the private banking info of millions of Americans every year. Fortunately, easy-to-follow rules of thumb can help you thwart phishing criminals and keep your money safe.


A common strategy of phishers is to call you directly, presenting themselves as your bank. They may suggest there’s an issue regarding your account that needs your urgent attention, or they may simply say they’re conducting routine account maintenance. What they’ll likely ask for next is your bank account number, your banking login credentials, or your social security number.


Private information like this should never be provided over the phone to someone who has contacted you, since you have no idea who is actually on the other end of the line. No matter how official and convincing the caller may sound, someone calling to ask for this type of information should raise a red flag.


If the scammer doesn’t succeed in coaxing this information out of you in the initial phone call, they’re likely to try a couple more tactics. One is to urge you to call a phone number they provide for your bank, or to visit a specific web address that they provide. These are most likely spoofed numbers and sites, with calls being answered by accomplices of the caller and the fake website siphoning your sensitive information or installing malware on your computer.


The way to thwart them is to not provide sensitive information during the initial phone call, and to avoid calling any number or visiting any website the caller provides. If you want to contact your bank, call them at the phone number listed on your statements, or type your bank’s known web address directly into your browser.

Can you invest IRA funds in a CD? And should you?

By Sabrina Karl

Certificates of deposit can be a great tool for saving toward a short-term goal, like building up a house down payment or stashing money for a big project or dream vacation. But what about retirement? Do CDs have a place in saving for your golden years?


The first question is whether CDs are an allowable retirement investment, and the answer is yes. When you open an Individual Retirement Account, or IRA, that account is simply a container, which can hold most types of investments, from bank deposits like CDs to stocks and bonds.


Opening an IRA CD is hardly different than opening a regular CD. At most banks and credit unions, all the CDs in their regular menu are equally available in an IRA. The difference isn’t usually in the CD itself, but simply in the account where you hold it.


Occasionally, however, an institution will promote a specific IRA CD offer. These are often longer-term certificates, which typically come with a more favorable rate.


But are retirement CDs a good idea? It’s true that CDs are extremely safe and entirely predictable, so they’re well-suited well to savers who have almost no risk tolerance or a strong aversion to investing in stocks and bonds.


But since a CD’s fixed rate of return generally lags these other investments over the long term – and usually significantly – investing your IRA funds in a CD will earn you far less over time. And in order to grow your nest egg sufficiently to fund your retirement years, the more substantial gains earned in the stock market are likely to be necessary.


That said, for savers who are very close to retirement, or who wish to hold a portion of their retirement savings outside the stock market, IRA CDs are indeed safe and reliable.

What are the best banks for savings and CDs?

By Sabrina Karl

If you have money to put away in savings or a CD, it’s tempting to default to the bank where you hold your primary checking account, as it’s hard to beat that convenience. But you can generally earn significantly more by branching out to different banks for different accounts.


Decades ago, Americans banked at one of the financial institutions in their local community. But the internet has brought hundreds of new options to consumers. Some of these are online-only banks. But there are also myriad traditional banks that have simply used the internet to expand their market to larger geographical boundaries.


Add to this all the credit unions in the country that have similarly broadened their reach. Not only are there credit unions that serve residents of your community, your county and your state — there are now over a hundred that are open to Americans living anywhere in the nation.


While it may feel easiest and safest to stick with the institution you know, its rates on savings accounts and CDs may only match the national average, or quite possibly fall below it. Meanwhile, other institutions pay 3, 4, or even 5 times the national average on savings accounts and CDs. It can’t be overstated that it literally pays to shop around.


Fortunately, you don’t have to check all the institutions yourself. In addition to the great rates you find on these pages, multiple websites filter the top rates currently available. Simply look for FDIC insurance on any bank (or NCUA insurance on any credit union) that you’re considering.


As with many things in life, you can trade small conveniences for monetary gain. Opening your savings account or CD at a new bank will involve some paperwork and electronic transfers. But the boost to your savings can be substantial.

Watch out for check overpayment scams

By Sabrina Karl

As sure as the sun rises, fraudsters will always try to separate people from their money. Bank accounts are particularly susceptible since they don’t carry the maximum liability protection that credit cards do. But knowing the most common scams can help you keep your account — and your money — safe.


Various agencies accept and track consumer fraud complaints, including the Federal Trade Commission, the Consumer Financial Protection Bureau, and the Better Business Bureau. In addition, many states also have their own consumer protection department.


From the millions of complaints received by these agencies, we know what the most commonly reported scams are, and one of these is the check overpayment scheme.


The scam targets those who are selling something via Craigslist, the classifieds, or another public avenue. The seller will get an offer, sometimes a generous one, from someone who appears very motivated to secure the deal and move the transaction quickly along.


After reaching an agreement, the buyer will later tell the seller some reason why their check will be for more than the purchase amount. They may say it was an error, or that the extra funds will cover fees they’ll incur from an agent or shipping representative. They then request that, after you deposit their check, you wire the surplus to a certain account or Western Union location.


The scam is that the check they’re providing will bounce, as it is counterfeit or forged. Your bank may not catch it immediately, but once they do, you will be out the full amount, and perhaps also your sale item if you shipped it.


Any check overpayment with a request to return the difference is a red flag, and you should abruptly end the transaction. In addition, it’s recommended you report the experience to all of the agencies above.

How do today's CD rates compare to the past?

By Sabrina Karl

It’s been more than three years since the Federal Reserve began pushing up interest rates, and CD rates have inched up accordingly. But exactly how far have they climbed compared to the historical lows of a few years ago?


First, a nutshell history on rates. In December 2008, the Fed dropped the federal funds rate to zero to lift the economy out of the Great Recession, and tethered it there for seven years. As a result, savings, money market and CD interest rates plummeted through 2015.


Since then, the Fed has hiked rates eight times, significantly raising bank deposit rates. The easiest way to compare today’s rates to the past is to look at FDIC national weekly averages. But this is important: The averages across every U.S. bank are far below what you can easily find by shopping around. In fact, the top nationally available rate in any term is three to four times the national average.


That said, national averages offer a scale of comparison. For instance, the FDIC national average for 1-year certificates was 0.66 percent last week. That’s double the 0.33 percent average of a year ago, and far above the 0.19 percent low between 2013-2016.


But the 1-year average in May 2009 (when the FDIC began weekly tracking) was 1.29 percent, indicating we’ve only made up about half the ground lost since the financial crisis.


Similarly, last week’s national average for 3-year certificates was 0.99 percent, compared to 1.82 percent in 2009. And for 5-year CDs, we reached 1.27 percent last week, while the 2009 average was 2.23 percent.


The steady uptick in CD rates over the last three years has certainly been welcomed by savers everywhere, but clearly the verdict is still out on whether a return to pre-recession rates is on any foreseeable horizon.

What’s the difference between brokered and bank CDs?

By Sabrina Karl

Certificates of deposit are a bank product, but did you know banks aren’t the only places to open one? In fact, if you have a brokerage account for your retirement savings or other investments, you might have noticed CDs being offered there as well. So are brokerage and bank CDs different?


The answer is both yes and no. The CDs you can open at a place like Vanguard or Fidelity are called “brokered CDs”, and they are indeed issued by a bank. But there are some important differences you’ll want to understand.


The primary advantage of brokered CDs is convenience. On the front end, you can open numerous certificates at various banks all within your brokerage account, saving you the trouble of establishing relationships with individual banks.


It also simplifies recordkeeping, since all the certificates appear together on your brokerage statement, along with maturity dates, regardless of how many banks’ CDs you access.


But as with most things, convenience comes at a price. Although brokered CDs are occasionally competitive with the top bank rates, usually you’ll earn less with brokered CDs. So you’ll have to prioritize between maximizing your return versus simplifying your process.


In addition, bank CDs always stipulate an unambiguous early withdrawal penalty, which you can calculate with basic arithmetic. Not so with brokered CDs, where exiting early requires you to sell the CD on the secondary market. Although your brokerage makes the selling process easy, you’ll enjoy no guarantees on a minimum price, even leaving your initial principal at risk.


For those chasing the highest returns, direct bank CDs are the way to go. But if you have little appetite for opening the necessary bank accounts yourself, and feel confident you’ll hold the CDs to maturity, sacrificing some return can make your life a little simpler. 

CD, time deposit, share certificate… What’s the difference?

By Sabrina Karl

If you shop for certificates of deposit in the newspaper or online, venturing beyond just your local bank, you’ll likely encounter some names for CDs that leave you wondering if you’re considering apples to apples.


CDs are what the banking industry calls “time deposits”, or sometimes “term deposits”. Those names signify that your deposit is made with an agreement that you will keep it at the bank for an established time period or term. This is different than checking, savings or money market accounts, where you can generally deposit and withdraw funds at any time of your choosing.


But while “certificate of deposit” and “CD” are fairly ubiquitous terms, not every U.S. financial institution uses those names, and shopping for the best CDs in the country will occasionally put a product in front of you that certainly looks like a CD but goes by some other name.


This most often happens at credit unions or community banks. Instead of CDs on their product menu, you might simply see “time deposits” or “term deposits”, such as “3-Year Time Deposit”. And at credit unions, where customers are members who hold a share in the credit union, you might see “share certificates” instead of CDs.


Does this matter? Essentially no. While some wonky banking rules specify minor differences in these products, they do not come into play for the vast majority of consumers. Whether it’s called a CD or a time deposit or a share certificate, it’s the same product: Deposit X dollars for a period of Y months or years and we’ll pay you Z percent interest.


So when you see X, Y, and Z in a deposit product’s description, rest easy that you are looking at that institution’s version of a CD, no matter the marketing name they’ve given it.

Americans leaving information on the table when choosing a bank

By Sabrina Karl

In today’s world of ever-increasing digital information, checking other buyers’ reviews is an easy way to inform our own consumer choices. But new survey data shows that while Americans are pretty savvy at utilizing reviews for choosing a restaurant or hotel, they’re rarely tapping this guidance in deciding where to bank.


The online survey conducted by The Harris Poll on behalf of Ally Bank asked approximately 2,000 U.S. banking consumers how much they considered reviews when choosing their financial institution, as well as how much reviews played into their decision-making on other fronts.


They found that almost 9 in 10 (87 percent) said checking online reviews and ratings before buying a product or service was at least somewhat important, and 78 percent indicated they trust online reviews as much as a personal recommendation.


Yet, when it came to banks and financial institutions, only 3 in 10 Americans (31 percent) said they had used online reviews to choose a financial provider in the previous year.


Even worse, 15 percent reported they didn’t know reviews of banks and financial institutions existed, and a full quarter (25 percent) said even though reviews were available, they opted not to check them.


Compare that to other common consumer decisions, where a much heftier half of survey respondents relied on reviews to choose a restaurant (53 percent) or a hotel (49 percent). Choosing a vacation spot also beat out checking bank reviews, with 36 percent of consumers reporting they had considered reviews in their travel decision.


"People seek advice online for a number of daily purchases but accept the status quo when it comes to banking," said Diane Morais, president of consumer and commercial banking products at Ally Bank. "They can and should expect more from their bank just like they do for other purchases.”

Are longer CDs taxed at a different rate?

By Sabrina Karl

If you’ve ever invested money in stocks or mutual funds, you’re likely aware that capital gains (and losses) come in two flavors: short-term and long-term. And the time you notice this is usually during tax season, since the two types are taxed differently.

But what if you’ve invested some of your savings in safer certificates of deposit? CDs come in short and long terms, and everything in between, so do their tax rates vary?

The answer lies in how CD returns are classified. Unlike stocks and mutual funds, which grow through dividends and price appreciation, or capital gains, what you earn on CDs is interest income. And when it comes to interest income on your tax return, the IRS employs a “one size fits all” policy.

That means it makes no difference whether your earnings are from a 6-month certificate or a 6-year certificate, or even a savings or money market account. Interest income is interest income, period.

You may also wonder when CD earnings become a taxable event. Does it depend on when you cash out the CD or when it matures? Again the answer is no, as certificate earnings become taxable whenever the bank or credit union applies the interest — usually monthly or quarterly — regardless of when you withdraw it.

One exception is CDs opened within an IRA. Because the same rules apply to all IRA investments, interest earned on retirement CDs is not taxable until the funds are dispersed post-retirement.

Whether you own one certificate or a portfolio of dozens, the tax implications of CDs are straightforward, and unfazed by any attempt to strategize term lengths. So invest in whatever CDs make the best sense for you, and know that your bank will report the interest income lump sum in time for tax seasons.

Does the amount of my CD deposit affect my rate?

By Sabrina Karl

If you’re getting ready to sock savings away in a certificate of deposit, you may know how much you want to deposit. But as you shop rates, you might discover deposit minimums and rate tiers influencing your decision.

Most CDs stipulate a minimum deposit. That’s the smallest amount you can invest to open a particular CD. Fortunately for modest savers, many certificates have entry points as low as $1,000 or $500. Others even lower the bar to no minimum at all.

But that’s not always the case. Sometimes depositing more funds will earn you a better rate, and it happens one of two ways.

Some certificates simply have hefty minimum thresholds, requiring a deposit of $5,000 or $10,000. And there are also “jumbo” CDs requiring $25,000 or even $50,000 in a single certificate. These larger CDs aren’t guaranteed to pay better than lower-minimum options, but often they do.

Then there are banks and credit unions that offer CD rate tiers. Here, for example, you may earn one rate on deposits up to $4,999, then a slightly higher rate above $5,000, and perhaps a third rate if you deposit $25,000 or more.

These options may lead you to stretch a bit on your deposit in order to score a higher rate, moving for instance from an initially planned $20,000 up to $25,000 to qualify for a well-paying jumbo certificate.

It may also impact whether you open one vs. multiple certificates. The strategy of splitting your savings into more than one CD — to lessen the penalty hit if you need to cash out some of your savings early, but not all of it — is a smart one. But if it prevents you from earning a higher rate with a single, larger certificate, you may want to reconsider.

Can CDs boost my credit score or help my mortgage application?

By Sabrina Karl

Certificates of deposit are great for stashing away money reserved for buying a home, since their withdrawal restrictions make them harder to access than other bank accounts. But can CDs actually help you qualify for a mortgage? And how do they impact your credit score?

Let’s start with your credit report. Here, the answer is that CDs have no bearing on how good you look to credit rating agencies. That’s because credit scores generally only factor in credit that’s been extended — in other words, your loans, debts and credit lines.

In contrast, bank accounts and investments are savings, not debt obligations, and therefore don’t fall within a credit report’s scope. So no matter how much money you hold in deposit at a bank, whether in CDs or other accounts, it won’t appear in your credit report or factor into your score.

The only exception is for individuals who use a CD as collateral to take out a personal loan. Here, credit has been extended, so the personal loan will make it onto your credit report.

As for how CDs influence mortgage lender decisions, any funds held in certificates can certainly count toward your down payment. But whether your down payment funds come from savings, money market, checking or CD accounts really doesn’t matter. Cash in any of these is calculated equally.

Because CDs are not as liquid as savings accounts, though, the lender may require you to spell out when you’ll cash in the certificates, and perhaps how much you’ll surrender in any early withdrawal penalties.

Other than that, however, owning CDs will not sway the lender to be any more or less favorable to you, making their best value that of securely holding your funds with reduced temptation until you’re ready to apply them to your new home.

How much higher will the Fed raise rates?

By Sabrina Karl

For U.S. savers, what a difference three years can make. Back in December 2015, the Federal Reserve hiked interest rates for the first time since the Great Recession in 2008, finally taking an upward step out of a seven-year valley of near-zero rates.

Fast forward to this December, and the Fed has now made eight additional increases, announcing the latest one last week. The Federal Funds Target Rate now sits 2.25 percentage points above its 2015 level.

This matters to cash savers because savings, money market and certificate of deposit rates are correlated with the Fed’s rate. While any single rate bump might not move the needle across the entire banking industry, this three-year period of nine hikes has driven up rates throughout the deposit accounts market.

But is the Fed finished, or will it hike rates higher still? There is never a reliable crystal ball for this question, as the Fed’s rate-setting committee holds sole responsibility for that decision, and privately meets to determine a verdict every 6-8 weeks. But with each new decision, they submit a written projection for the future, and currently, they’re signaling that we may see two more bumps in 2019.

This information matters particularly to CD savers, since they lock into a rate for the future. As a result, opening a new CD right before a rate hike is announced can be disappointing. On the other hand, savings and money market funds can spontaneously benefit from any number of increases, but at the expense of lower-than-CD rates.

The Fed’s forecast last week of two more hikes in 2019 is a slight downgrade from its previous prediction of three increases next year. But still it suggests that the rising tide cash savers have been enjoying may still have some swell in it.

To score the best CD rates, watch for limited-time promotions

By Sabrina Karl

When you’re looking to sock money away in a certificate of deposit, the No. 1 way to maximize your earnings is to do your homework and shop around. That’s because today’s internet-connected world enables you to search the rates of dozens of banks and credit unions offering CDs nationally or in your area.

As you plot out what you’d like to invest in CDs and for what duration, you’ll likely think of one year, two years, three years, etc. And what you find may fall into those tidy increments. But being flexible will open you up to opportunities that could boost your earnings.

Flexibility allows you to capitalize on promotional CDs that may have unconventional terms. Banks and credit unions tend to have a standard menu of traditional-duration CDs always on tap. But many will offer a special certificate from time to time, one with a much better rate and perhaps an unusual term. It’s not uncommon to see promotions for 5-month, 17-month or 21-month CDs.

Being open to odd-term CDs and adjusting your plan based on what you unearth will help you build a CD portfolio that may not look like what you originally plotted out, but will maximize what you earn from your CD investments.

Another kind of flexibility is also useful, and that’s flexibility of timing. Promotional CDs tend to pop up without warning, and are often available for a limited time. So patiently shopping over time, instead of on a single day, will lead you to more special offers. Funds flexibility will then enable you to jump on a great deal when you find one.

The most lucrative CD portfolios are seldom predictable, perfectly tidy collections. But for savers willing to shop over time and move when they turn up a winner, bottom lines are rewarded.